New Directions

Are Multinational Companies Un-American?

Of course they are, and therein lies the problem for the U.S. A great many of the world’s multinational companies were at one time American companies. They were located in America, they manufactured their goods in America, they hired American workers to make those goods, and they sold their goods in America. Not any more. It’s hard to find a large, completely American company these days – there are better profits to be made elsewhere. So, the question that needs to be asked is this: are these formerly American companies helping or hurting America? Does America benefit from their existence or does their existence harm America?

If we go back to the beginning, it is easy to see that the multinational companies arose out of two desires on the part of the owners: 1) a larger market and 2) a cheaper labor force. Fifty or a hundred years ago this desire was satisfied by the movement of American companies from the industrialized north to the agrarian south. Everything was still in the family, so to speak, and because these companies were still entirely contained within the boundaries of the U.S. no one could say they were un-American. On the other hand, there were a lot of confused people in the north staring at vacant factory buildings, slowly being covered by weeds and blowing dirt, who were wondering only one thing: “Now what do we do?”

In time, the costs of labor in the American south became a burden to the business owners and they began looking for other, even less expansive ways to manufacture their goods. Sure, they turned to mechanization, and that certainly eliminated a lot of jobs – thus increasing profits. But machines can be expensive too. And they break. And they get outdated. So the business owners began to look further afield and soon saw that there was a semi-infinite supply of extremely cheap labor in the developing world. These people would work for next to nothing compared to American workers. All that was needed was some sort of legal framework to enable the companies to exploit this newfound source of labor. In time, with the help of the U.S. government obligingly creating favorable tax legislation and foreign governments doing the same, a new mechanism was created where companies that were based in the U.S. could manufacture their goods someplace else, but still sell them in the U.S. Of course their American workers lost their jobs as a result, and therefore couldn’t buy their products – but that wasn’t a problem, there were plenty of other Americans who had jobs, and they could buy the foreign made products. And they did – gleefully – because the products cost much less than they used to. The company owners had passed on the savings to the customers (well, some of it anyway, they of course pocketed a lot of it too).

It wasn’t long before a lot of other companies caught on and a slew of multinationals were born, giving rise to the Celtic Tiger in Ireland, the Asian Tigers in the Southeast Asia, and the Hidden Dragon/Crouching Lion we call The People’s Republic of China – or just China Inc for short. Everybody got into the act and what had once been American companies established roots all over the world. And then a transformation happened. These corporations began to look at themselves and found a new identity – they weren’t American, nor were they Irish, nor were they Chinese – they weren’t anything except corporations. And with this internal revelation they realized that they owed nothing to any country. They no longer had any allegiance to any flag. They had no responsibility for any particular population group. Their only “raison d’etre” was to make money – profit actually – for their owners, and they did. Lots of it.

It is now becoming clear that all the favorable tax treatment the multinationals have received from the U.S. and other countries has been shortsighted. Sure, there was a temporary benefit for a lot of people when U.S. jobs were exported. A lot of stuff became cheaper to buy for those Americans who still had jobs, but eventually the whole thing caught up with us. We’ve exported way too many jobs and now we can’t afford to buy even the cheap imported stuff that comes in. So we use our credit cards. And we get home equity loans. And we play financial roulette, buying and flipping houses. Now, as our economy lies a smoking ruin, we look to the multinationals for help. Will they hire us? Will they create new jobs for Americans? Hardly. These stateless entities care only for themselves; they have become parasites rather than good citizens. They are by definition un-American.

So what can be done to save the American economy from being completely bled to death by these heartless leeches? Tax reform. Of course that takes a government that isn’t being paid by lobbyists for the multinational corporations, but that is our only hope. The cure for the multinational problem is simple: give huge tax incentives to truly American companies, i.e. companies that hire Americans, manufacture in America, and sell their products in America. As for the multinationals – tax the Hell out of them. Then send every American a check (sort of like how the State of Alaska sends every citizen of Alaska a check based upon oil company revenues) – their share of the tax on multinationals. We could then use that money to buy goods made by truly American companies.

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